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settled that a payee may be a holder in due course, and would be such if he took the paper for value, without notice of defenses, and before maturity: Boston Steel & Iron Company v. Steuer 183 Mass. 140, 66 N. E. Rep. 646.
It appears to have been the practice in some cases for foreign debtors to remit to their creditors by bills of exchange drawn or accepted by third persons, and made directly payable to the creditor -the person furnishing such bills being technically known as a ‘remitter.' In such cases the creditor-payee, if he took for value and in good faith, was a holder in due course: Boston Steel & Iron Co. v. Steuer supra.
Has the Uniform Negotiable Instruments Law changed the common law, and limited holders in due course to those who take the instrument under an indorsement or other negotiation thereof from a former holder, and excluded from the category of holders in due course, payees. The question turns on the proper meaning and effect of section 30 defining "negotiation" as such a transfer as makes the transferee the “holder” of the instrument, and providing that if payable to order the instrument is negotiated by indorsement and delivery by the holder; Section 191, defining "holder" to mean the payee or indorsee of a bill or note who is in possession of it, or the bearer thereof (if payable to bearer); and section 52 defining a holder in due course as a “holder who has taken the instrument under the following conditions”
"4th. That at the time it was negotiated to him he had no notice of any infirmity in the instrument or defect in the title of the person negotiating it. Do the underscored words in the sentence last quoted require as a necessary "condition” to constitute a holder, a holder in due course, that he shall have taken the paper by a "negotiation" from a former holder. The Supreme Court of Iowa answered this question in the affirmative in Vander Ploeg v. Van Zunk 135 Iowa 350, 112 N. W. Rep. 807. This case proceeded largely on the authority of the English case of Herdman v. Wheeler (1902) 1 K. B. 361, construing similar provisions of the English Bills of Exchange Act. But the Herdman case was virtually over-ruled by Lloyd's Bank v. Cook (1907) 1 K. B. 794. In Boston Steel & Iron Company v. Steuer supra it was held that section 52 did not require a negotiation from a former holder to constitute a holder a holder in due course, and that a payee might be, and was in that case, a holder in due course. It is to be noticed that section 52 does not in express language require a negotiation from a former holder. It is only by an inference that such a requirement can be read into that section. Nor is the inference a necessary one. The inference, not being a necessary one, should not be made at all, since the result would be to induce an arbitrary and unfortunate departure from the common law. Even if it should be said that negotiation, in some sense, is essential to constitute one a holder in due course, it would seem that section 30 should not be considered as restricting negotiation in all cases to the kinds of negotiation therein provided for (viz., indorsement in the case of paper payable to order). Indeed, section 48 provides for negotiation otherwise than by indorsement in certain cases. Section 49 also provides for a negotiation without indorsement. It is noteworthy that under section 191 a payee is included in the definition of "holder."
There seems, on the whole, no sufficient grounds for deeming that the Uniform Negotiable Instruments law has changed the common law by limiting holders in due course to such holders as have taken the instrument by negotiation from a former holder, and excluded payees from being holders in due course.
The following cases hold that under the Uniform Negotiable Instruments law, a payee may be a holder in due course: Bank of Commerce & Savings v. Randell (Neb.) 186 N. W. Rep. 70; Liberty Trust Co. v. Tilton 217 Mass. 462; Boston Steel & Iron Co. v. Steuer supra; Merchants Bank v. Smith 59 Mont. 280, 196 Pac. Rep. 523; Redfield v. Wells 31 Ida. 415; Johnston v. Knipe 260 Pa. St. 504; Brown v. Rowan 91 Misc. Rep. 220, 154 N. Y. S. 1098; Figuers v. Fly 137 Tenn. 358, 193 S. W. 117; Dixon v. Dixon 31 Vt. 450; White-Wilson-Drew Co. v. Egelhoff 96 Ark. 105, 131 S. W. Rep. 208; Ex parte Goldberg v. Lewis 191 Ala. 356, 67 So. Rep. 839; Thorp v. White 188 Mass. 333, 74 N. E. Rep. 592; National Investment & Security Co. v. Corey 222 Mass. 453, 111 N. E. Rep. 357; Colonial Fur Ranching Co. v. First National Bank 227 Mass. 12, 116 N. E. Rep. 731.
To the contrary are Vander Ploeg v. Van Zunk supra; Builders Lime & Cement Co. v. Weimer 170 Iowa 444; 151 N. W. Rep. 100; Southern Natl. Life Realty Corp. v. Peoples Bank 178 Ky. 80, 198 S. W. Rep. 543; St. Charles Sav. Bank v. Edwards 243 Mo. 553, 147 S. W. Rep. 978; Bank of Gresham v. Walch 76 Ore. 272, 147 Pac. Rep. 534; Britton Milling Co. v. Williams (S. Dak.) 184 N. W. Rep. 265, 187 N. W. 159; Long v. Shafer 185 Mo. App. 553, 171 S. W. Rp. 690; Bowles Co. v. Clark 59 Wash. 336, 109 Pac. Rep. 812.
Our Supreme Court has now passed upon the question in the case of Drumm Construction Co. v. Forbes 305 111. 303, 137 N. E.
and held that under the Uniform Negotiable Instruments law a payee may be a holder in due course. It is unfortunate that a conflict in the law, that apparently did not exist at the common law, should have been produced by the very statute that was primarily intended to effect uniformity in the law.
L. M. G. DEEDS—DELIVERY IN ESCROW, AND DELIVERY NOT TO TAKE EFFECT UNTIL AFTER LAPSE OF TIME.—In the case of Gronewald v. Gronewald, 304 Ill. 11, 136 N. E. 489, the controversy hinged upon the effect of handing a deed over to the agent of a bank upon the condition that the deed should not be surrendered to the grantee until the grantor's death. The evidence indicated it was the grantor's intention at the time to part with its control, and the decision in the principal case that this amounted to a valid delivery of the deed, seems in accord with the weight of authority (Phenneger v. Kendrick 301 Ill. 105; Gornel v. McDaniel 269 Ill. 364, 366; Newman v. Workman 284 I11. 82; Hudson v. Hudson 287 Ill. 301.)
The difficulty encountered in the decision of the principal case, was that the deed in question was handed over to one who occupied the position of advisor to the grantor, at least in the matter in question. It was contended that delivery to take effect only after a lapse of time, must have been to a disinterested person. This rule is recognized by the court and, very properly (Baker v. Baker 159 Ill. 342), but was held not applicable; for in defining who is an interested person within that rule, the opinion points out that a general agent of the grantor may be depositary of such a deed.
This comment, however, is concerned with the use of the term "escrow" as used in the opinion, not that it affects the conclusion arrived at in the case, for it does not, but because it is conceived the use of the term "escrow” was not strictly accurate in the principal case. The act under scrutiny in the principal case was that of absolute parting with control of the instrument, title to vest in the grantee after the death of the grantor. The condition upon which the passing of title depended thus became one which was certain to happen, and over the happening of which the grantee had absolutely no control. On the other hand, a deed is delivered in escrow when something is required to be done by the grantee, or the grantee is to refrain from doing some act or cause it to be done or not to be done. (Jackson v. Catlin 2 Johns. 248; Skinner v. Baker 79 Ill. 496; Hoig v. Adrian College 83 III. 268; Burnap v. Sharpstern 149 I11. 225; Demesmey v. Gravelin 56 Ill. 93; ILL. L. Rev. XVI 626.) It is true that the case of Baker v. Baker 159 III. 342, refers to a delivery to the grantee of a deed not to take effect until after the grantor's death as an attempted escrow, but it would seem an escrow is as much to be distinguished from a delivery not to take effect until after the lapse of time, as is a determinable fee to be distinguished from a deed with a condition subsequent.
E. M. L.
EASEMENT-EXTENT OF RIGHT.-In Dickman V. Madison County Power Co. 304 Ill. 472, 136 N. E. 780, the St. Louis, Springfield & Peoria Railroad had a right of way over the strip of land about which the controversy arose. The railroad was an electric railroad, and while under the rule of such cases as Tinker v. Rockford 137 Ill. 123, this right of way amounted only to an easement for the purposes of the railroad, the construction is never to be so strict as to deprive the owner of an easement of its fruits. (Noble v. I. C. R. R. Co. 111 Ill. 437.) In the principal case the railroad used the right of way, also, for lines to carry power used by it in propelling its trains. This power was generated in its own plant. The plant for generating this power had a capacity greater than for the present needs of the railroad, and surplus power was sold by the railroad to a light and power company. The kind of electric current sold to the light and power company was different from what it itself used, but in an emergency, it was shown this different kind of current was adaptable to the railroad's use as well. This current was carried over lines of wire strung along this right of way, and it was claimed that this was an excessive use of the railroad's easement of right of way.
The court holds that the railroad company might maintain these lines even if they were not being used at the time for the purposes of the railroad, if they were placed there in good faith with the intention of providing for future needs of the railroad, and the mere fact that they were being used in the meantime to dispose of surplus power at a profit, would not render them an excessive user of the easement.
The court confirms, also, the rule that even if the use were excessive, that would not work an extinguishment of the easement, but would call only for an order restraining the excessive use. (See Brownlie v. Harding 214 Ill. App. 101 and cases there reviewed.)
E. M. L.
POWERS-EFFECT OF A Power COUPLED WITH A LIFE ESTATE. -In Frank v. Frank 305 Ill. 181, the conveyance was X and Y, grantors, husband and wife, to Y, the wife, for life, remainder to their five children, with power in Y to sell, mortgage or lease said premises or any part thereof, it being the intention that said Y shall have absolute control of said premises during her lifetime, and may sell or dispose of same, etc. The court held that the power thus given to Y must be construed to be one to pass only a life estatė within the rule that language conferring a power of disposal is regarded as pertaining only to the estate devised, and as authorizing a conveyance of such estate only. The authorities even more recent than those the principal case cites in support of the proposition, would seem amply to justify the application the principal case makes of it. (Strickland v. Strickland 271 Ill. 620; Goldman v. Cervenka 278 Ill. 445; Barton v. Barton 283 Ill. 340; Pratt v. Skiff 289 Ill. 274).
It has been suggested that the principal case is not in harmony with the earlier case of Bergman v. Arnhold 242 Ill. 218. That criticism is not justified. In the Bergman case the limitation was, X, testator, to trustee to use and apply, so far as necessary, the rents, income and proceeds of the residue of the trust property for the support, benefit, and comfort of A (wife of X) during her life, with power to sell, convey, mortgage and assign and transfer, etc.; and upon application from time to time in writing of the said A, to convey and assign to her, and to sell, assign, transfer, mortgage, convey or otherwise dispose of to such other person or persons as she may in such written application designate, etc., the whole or any part or parts. The testator provided that on the death of the wife all funds and property remaining should be sold, conveyed, and disposed of as A should by her last will and testament appoint, and in default of such appointment, then over. Of this the court in the case said that if the will had given the wife, A, only a life estate with a power as to the remainder, then such power could not enlarge the life estate, but the court construed the above mentioned provisions of the will as giving A an estate in fee, if she chose to take it. In this, it would seem, the court is right, for the provisions of the will in the Bergman case, are very similar to those in the case of Barton v. Barton 283 Ill. 340, above cited, which recognizes the rule applied in the principal case (283 Ill. 340), but points to the language in the codicil to the will in that case to the effect that the power to sell and dispose was of full and absolute title.
Furthermore, one should not lose sight of the further distinction that in the principal case the power is one in a deed and in the Bergman case, the power is one in a will. Intention is so important in wills that the courts will disregard technical language in wills to effectuate the testator's intention. The same latitude does not obtain in case of deeds. (Duffield v. Duffield 268 Ill. 33; Coogan v. Jones 278 Ill. 285; Duffield v. Duffield 293 111. 303).
That a testator may dispose of what remains unused by a particular donee who has power to use all, would seem clear (Defrees v. Boyden 275 Ill. 551; Bradley v. Jenkins 276 Ill. 511; Boyle. v. Moore 299 Ill. 573, 575; Boye v. Boye 300 I11. 511; Bohn v. Irvingtom 303 Ill. 84, 85.) And it would seem that that is all that was attempted in the Bergman case.
E. M. L.
SCHOOLS-PROHIBITION OF SECRET SOCIETIES.—In Sutton v. Board of Education of City of Springfield, 306 Ill. 507, 138 N. E. 131, the court sustained the validity of a statute which prohibits secret societies or fraternities in the public schools and authorizes the suspension or expulsion of students who fail to comply with its requirement. There is no doubt of the correctness of the decision and of its support in the authorities. The right to attend the public schools is not a constitutional and an inalienable right, and the state is certainly the master and the owner of its own benefactions. The only difficulty lies in the cases where there are no such statutes and the school boards have themselves established such regulations.
Where the penalty is other than expulsion there should be no doubt of the implied power to establish the regulations. This with perhaps the sole exception of the case of Wright v. Board of Education of St. Louis 246 S. W. 43, has been the holding of the authorities. Whether the punishment of expulsion, however, can be meted out under an implied power and an implied power alone is another question especially in those states where there are compulsory educational laws and the students concerned come within the age limit : Stallard v. White, 82 Ind. 278.
It would seem that the test should be applied to the penalty and not to the prohibition. All thoughtful persons will concede the wisdom of the prohibition, but has a school board in the face of a compulsory education law the implied authority to turn out upon the streets students whose very shortcomings are an indication that they need the training and the discipline that the schools afford? Have not our schools and colleges used the weapon of expulsion altogether too much, and is not its use a confession of educational ineffi